The Point

Thriving in the Industry Transformation: Five Things We Can Learn From Innovative Mortgage Servicers

Jul07

Michael AdomatisProduct Manager, Lending Solutions, Fiserv

The past few years have seen tumultuous change in the mortgage banking industry as many servicers struggle to keep pace with continuous compliance directives at the federal and state level, increasing per-loan servicing costs, and rapidly changing consumer expectations. But what if this reaction could be less about just keeping up with the changes, and more about a paradigm shift to a focus on what the borrower wants and needs?

The regulatory maelstrom in mortgage banking has triggered an industry transformation, including new ways of serving borrowers that meet their changing – and increasingly digital – expectations. Innovative servicers are directing their attention to borrower engagement and self-service tools that provide a consistent experience across all lending functions, including servicing. They have altered their way of doing business to not only roll with the industry changes but also thrive in – and even help drive – the transformation.

Innovative servicers have altered their way of doing business to not only roll with the industry changes but also thrive in – and even help drive – the transformation.

Here’s what we can learn from servicers that have an impassioned focus on borrower engagement:

Enhanced communication is closely tied to borrower satisfaction. Properly timed and concise texts, emails, voice communications and website postings are more effective and efficient than sending multipage documents to borrowers month after month – for up to 30 years. To boost customer satisfaction, servicers need to give consumers the right information at the right time, and using the method the borrower prefers. For instance, 77 percent of consumers responding to the Fiserv Seventh Annual Billing Household Survey say payment reminders would likely increase customer satisfaction. Borrowers should be able to set their own communication preferences, opting in or out of various channels – and may prefer multiple methods of engagement.

Invest in self-service capabilities. Seventy percent of monthly bills are paid online, according to a 2014 study by Raddon Financial Group, part of Fiserv. While mortgage payments have not yet reached that percentage, savvy servicers offer websites that allow for self-service payments, transaction verification, profile changes and tailored communication. Borrowers want 24/7 access to their accounts, including the ability to easily get statements and make payments through a variety of channels, upload pertinent information and documents, make changes to their personal information and receive the information they need about their finances in the manner and timeframe that’s most convenient to them.

Expand ways borrowers can interact with you. Innovative servicers provide multiple ways to interact – a telephone call in case the borrower needs to talk to someone, the ability to make a one-time payment over the phone or through a website, or the capability to walk into a retailer to make a payment. Today, there are more options than ever for sending and receiving information and for acting on that information. For servicers, that may mean rethinking the way borrowers can elect to receive information and the choices they have for interaction.

Implement an e-signature option for borrowers. Document exchange and acknowledgement doesn’t end once the loan is closed. For all of those servicing disclosures, updates and general document transferring needs, consider providing an electronic signature option. Whether for one-time "as needed" use or ongoing access as part of your self-service portal, offering borrowers the ability to quickly execute documents streamlines the review, return and filing process. Regardless of deployment, the ability for borrowers to electronically sign documents offers not only convenience but also peace of mind.

Direct distressed borrowers to an online channel. Previously, a missed payment was the first clue servicers had that something was amiss with a borrower's finances. A borrower can now go online to update financial information, including any supporting financial documents, and begin to explore options for loan modifications. Enabling electronic borrower communication and interaction maintains a level of control for the borrower and alleviates the discomfort of revealing a troubling financial situation to a caller. Plus, borrowers typically share more accurate financial data through online channels because of the perceived "anonymous" nature of the exchange

Meeting borrower demand for digital access to loan information and payments, including improved communication and interaction, will help lending organizations thrive in the 24/7 digital transformation taking place in our industry. Borrowers, historically almost an afterthought for servicers when secondary market investors were seen as the primary customer, are now front and center as innovative servicers increasingly focus on enhanced communication and self-service capabilities. When borrower support and satisfaction are the primary focus, all parties – the borrower, servicer, investor and insurer – win.